CANADA STOCKS-TSX ends lower as miners, energy weigh; TransCanada up

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* TSX closes down 65.71 points, or 0.51 pct, at 12,707.41
* Gloomy global outlook hurts resource companies
* TransCanada gains after environment report on Keystone
By Alastair Sharp
TORONTO, March 4 (Reuters) - Toronto's main stock index
closed lower on Monday, led by a drop in the heavyweight mining
and energy sectors, as weaker oil prices and global economic
worries hurt investor sentiment.
The decline was slightly offset by a gain in TransCanada
Corp after a U.S. government report said its
contentious Keystone XL pipeline project would not likely
increase the pace of development of Canada's oil sands.
But most resource-related stocks were lower following weak
Chinese manufacturing and services sectors data that added to
concern about slower growth in the world's second-largest
economy.
A lack of progress in forming a new government in Italy and
broad U.S. spending cuts that automatically kicked in on Friday
added to the gloom.
"There's still a lot of uncertainty, the sequester situation
in the United States for one," said Irwin Michael, portfolio
manager at ABC Funds in Toronto. "With gold down, oil down -
you've got two basic commodity prices which will clearly affect
the TSX."
The Toronto Stock Exchange's S&P/TSX composite index
closed down 65.71 points, or 0.51 percent, at
12,707.41.
"We're back to the worries about the international economic
situation. It started with the Italian election and then the
economic numbers coming out of Germany and China," said John
Kinsey, a portfolio manager at Caldwell Securities. "Europe and
China still seem quite sluggish, as does Japan."
Materials stocks, which include miners, played the biggest
role in leading the market lower, hurt by a 2.8 percent decline
in gold producers. Barrick Gold Corp, down 2.7 percent
to C$29.39, was a major weight.
Gold miners fell as the price of bullion eased, hurt by
weaker demand for gold-backed exchange-traded funds.
Energy stocks also stumbled with the price of the underlying
commodity. U.S. oil futures fell to their lowest level in 2013
on Monday, declining for a third consecutive session in reaction
to slowing growth in China and indicators that oil markets are
amply supplied.
Canadian Natural Resources Ltd, down 2.5 percent to
C$31.26, played the biggest role of any single stock in leading
the market lower.
Partly offsetting the losses was pipeline company
TransCanada. Its shares closed up 1 percent at C$48.33, as
Friday's environmental report about the Keystone pipeline
increased speculation the project will win U.S. clearance.
A final U.S. decision on approving or rejecting Keystone is
expected by August.